중앙데일리

Corporate Spending on Facility Investments Expected to Surge

Apr 06,2000

According to a report released Thursday by the state-run Korea Development Bank (KDB) corporate spending on facility investments by domestic companies is rebounding sharply. The report, entitled ＂Prospects for Industrial Facility Investments in 2000＂, stated that facility investments by domestic companies are expected to rise 22.1 percent year-on-year to 44.96 trillion won.

By sector, investments by the manufacturing industries are projected to surge 43 percent over last year, whereas investments by non-manufacturing sectors are expected to rise by a mere 2.7 percent.

Investments by conglomerates are projected to shoot up 48.5 percent, in a sharp departure from last year＇s decline of 2.7 percent. Small and medium-sized companies are also expected to maintain a double-digit rate of growth in facility investments of 23.6 percent, down from last year＇s surge of 40 percent. According to the KDB, the manufacturing sector＇s reliance on internal finances to procure investment capital is likely to rise from last year＇s 62.7 percent to 71.6 percent this year. In contrast, the ratio of capital procurement from stocks among external finances will drop sharply from 12.1 percent to 2.2 percent, but the proportion of loans from financial institutions is expected to rise slightly to 14.5 percent from last year＇s 11.7 percent.

The anticipated surge in facility investments is attributed to an acute need for facility expansion after the massive scale-down in investments during the 1997-1998 period, as well as the forecast of active investments in information and communication areas, including computers and semiconductors, in preparation for a digital economy. Meanwhile, last year＇s facility investments were tallied at 36.82 trillion Won, an increase of 2.4 percent year-on-year.